In the fast-paced world of workers’ compensation claim management, we are challenged on a daily basis with ethical issues and dilemmas. While we all understand the difference between right and wrong, ethics present continual gray areas we must confront to protect the interests of our employer and its insureds.
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What are Ethics?
According to the Webster-Merriam dictionary, ethics are:
• 1: the discipline dealing with what is good and bad and with moral duty and obligation
• 2a : a set of moral principles : a theory or system of moral values <the present-day materialistic ethic> <an old-fashioned work ethic> —often used in plural but singular or plural in construction <an elaborate ethics> <Christian ethics>
• 3 plural : a set of moral issues or aspects (as rightness) <debated the ethics of human cloning>
As you can see, the challenging thing about “ethics” is that it is derived from a system that is dependent on the values and beliefs of the individual. The correct answer of what we should do is often muddied by the human condition and the adversarial process of resolving workers’ compensation claims.
Ethical Approaches to Negotiations
While the workers’ compensation system is premised on the idea of “no-fault” injury, this often leads to a high level of contention when trying to resolve disputed cases. This results in different approaches a claim handler can take when trying to resolve those cumbersome files.
• Sportsman Approach: The system is a game of chance. When does bluffing and puffery cross the line?
• Do the Right Thing: While this approach tends to avoid bluffing, it is more direct. However, the subject is often changed when a weakness in one’s case becomes an issue.
• Hybrid Approach: Combines the two approaches, but sometimes requires you to go “all in” when the stakes are high or rise past our personal comfort level.
Unfair Claims Practices and Consequences
Failing to deal with injured claimants in an unfair and unethical manner leads to countless issues. These practices are often characterized by the following traits:
• Failure to thoroughly investigate
• Exploiting the financial vulnerability of the policyholder
• Making unreasonable demands on the policyholder during claims
• Claims “extortion” – e.g.—accusing the policyholder, without reasonable basis, of wrongdoing
• Spoliation of evidence
The list is endless. The consequences can also include, but are not limited to, judicially imposed sanctions, admissions of evidence and other civil/criminal penalties. For the claim handler, it could also include loss of license, job/promotion opportunities and reputation.
Effective and Ethical Claims Handling
An ethical claim handler needs to be proactive on a daily basis. Part of the process includes following best practices on claims investigation, established rules of conduct and the law. They should also be aware of rules regarding proper witness investigation, policies regarding required filings/paperwork and issuing good faith denial.
It is also important to be aware of other intangibles that promote a zealous protection of the insurer’s interests, yet at the same time consider the rights of the injured party.
• Know what is not negotiable
• Be honest and avoid parsing words for personal gain
• Keep your promises
• Have multiple options/think outside the box
• Be able to say NO!/Know when to walk away
Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: [email protected].
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